merchant discount rate

Dictionary of Banking Terms for: merchant discount rate
merchant discount rate

fee charged a merchant for processing bank card sales drafts and crediting the funds to the merchant’s account. The merchant discount depends on sales volume; the discount declines as sales volume increases, and is negotiated individually with each merchant. If the merchant discount is 2%, the merchant keeps $98 for every $100 in sales.

Copyright (c) by Barron's Educational Series. Reprinted by arrangement with the publisher of this site.